1. Field of the Invention
The present invention relates to computer-based systems for calculating and administering taxes. More specifically, the present invention relates to a method and an apparatus for determining taxes by applying tax rules that are specified using configurable templates.
2. Related Art
As companies expand their businesses beyond national borders and into the global marketplace, it is becoming increasingly harder to ensure that taxes are accurately determined. Determining taxes and managing tax compliance on a global scale is an enormously complicated task because each legislature with a right to levy taxes within its jurisdictional boundaries can establish its own set of taxes, as well as its own set of rules for regulating tax compliance. For example, in the United States alone there are over 6,000 individual jurisdictions that have the right to levy taxes, and perhaps that many more again worldwide.
The ad-hoc nature of the information required to calculate taxes makes codification and structuring of such information difficult. Consequently, existing computer-based systems for managing tax compliance are custom-built for each jurisdiction. This requires large amounts of programmer time to build systems for each jurisdiction, which can result in a considerable expense. Moreover, adding new countries or complying with new rules involves producing yet even more code, and consequently requires even more programmer time. Unfortunately, much of this programmer time is wasted because similar solutions are typically developed for each of the different jurisdictions.
Moreover, tax rules continually change for each jurisdiction. Hence, the underlying code for a computer-based tax management system must be continually modified to keep pace with these changes. At present, these changes are made at significant cost by a skilled programmer operating under the direction of a tax expert for each of the different jurisdictions.
What is needed is a method and an apparatus for determining taxes and managing tax compliance requiring little or no programming for individual tax jurisdictions. In other words, what is needed is method and an apparatus for determining taxes and managing tax compliance that can be configured by an expert in the field, such as a tax professional who may have little or no knowledge of computer programming.